South Africa is increasing health and defense budgets while raising VAT by 0.5%. This comes after U.S. aid cuts, especially to HIV programs, straining the healthcare system caring for 5.5 million patients. President Trump’s cancellation of PEPFAR funding adds pressure on these initiatives.
South African lawmakers have proposed increasing spending on health and defense following cuts to U.S. aid. To balance the budget, they also plan to raise the value-added tax (VAT) by 0.5%, which will impact the cost of living. The healthcare system faces challenges as it supports the largest HIV population globally, with 5.5 million individuals on critical antiretroviral treatments. The situation worsened after the U.S. Agency for International Development (USAID) reduced funding, particularly following the cancellation of PEPFAR by President Trump, which previously allocated over $400 million annually for HIV initiatives and NGOs in South Africa.
In summary, South Africa’s budgetary adjustments aim to bolster health and defense sectors in the wake of reduced U.S. financial support. The proposed VAT increase coincides with significant operational pressures on the country’s health infrastructure, particularly in HIV management, exacerbated by the discontinuation of vital funding from the U.S. government. These changes reflect urgent fiscal needs and responses to international aid shifts.
Original Source: www.voiceofalexandria.com
